Strategies to Handle Student Loan Debt in 2020

It’s hard to find a silver lining during COVID-19, but if you’re repaying student loans, there might be some good news. As of 2020, the average graduate has $29,900 in student loan debt. That’s a lot of money, and a huge commitment for young adults who have recently completed their schooling.

If you received a government loan while you were a student, you are most likely receiving relief from the government. The Department of Education has set interest to 0% for the remainder of 2020 and suspended all loan repayments. This act has even been extended to defaulted loans, where collections have stopped.

Anyone impacted by this relief effort is given an opportunity to benefit. Whether or not your employment has been impacted by COVID-19, this is an opportunity to reevaluate your repayment strategy. Any type of federal loan flexibility it uncharacteristic, but making the best of the opportunity can work in your favor years down the road.

If You Can Make Repayments

Pay! Pay! Pay!

If you can continue making payments, now is a great time to chip away at those federal student loans. They’re not collecting interest and you’re not forced to make repayments. This means you can reduce the amount you owe so you’ll be charged less interest when repayment resumes. Your interest rates won’t change, but your principle will decrease.